Written by attorney Dustin James Wetton

Pregnancy and Taxes: When does your child qualify as a dependent?

Even though the government has pushed back the tax deadline from April 15th to April 18th this year due to a government shut-down, this article is still a bit late for this last year’s tax filing season. However, because the topic is about pregnancy, this article can apply to anyone who is pregnant now, or will be pregnant the rest of the year. Did you know that most middle-income families can save up to $1,300 per year on their federal taxes by having a child? With such savings, you have to ask just how can pregnancy affect your taxes. The answer is, it really doesn’t.

Pregnancy is a momentous occasion, bringing joy, much change, and of course, life into the world. With all such potential happiness, according to the US Department of Agriculture, the average, middle-income family will spend nearly $300,000 on each child. These expenses don’t start the day of your child’s birth, but instead, start to accrue the day you find out you are pregnant, or even before that if you are planning on having a child. Pregnancy expenses are not cheap either. They can range from healthcare costs and maternity clothing, to pregnancy classes and nursery preparation. Thus, how are taxes not affected by such a change?

Normally, there are many tax benefits to having a child. First, there is the Child Tax Credit, which is a flat tax credit based upon living status, age, and income. Further, there are many expenses that beneficially affect taxes, such as healthcare costs, day-care, and education costs. While these expenses are heavily related to those costs accrued during pregnancy, the IRS does not see it that way. To claim your baby for the tax year he/she would have to be born by 11:59:59 on December 31. The IRS has made this matter very simple compared to adoption legislation and case summaries, the children are not dependents until they are actually born.

While this law keeps things simple, it may be something that should be reanalyzed by our government, you.

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